Glossary

51% Attack

A potential security vulnerability in Proof of Work systems, wherein a malicious entity gains control of the majority of the computing power or hash rate.

Composability

The ability to use existing components and resources as building blocks for new applications.

Interoperability

The ability of a system to connect to and work with other systems in a coordinated fashion while imposing no limits on the end-user. In blockchain, interoperability refers to the ability of disparate blockchain systems to interact with each other.

Layer 1

Base layer blockchain architecture, e.g. Bitcoin, Ethereum.

Layer 2

Off-chain network lying on top of the base (layer 1) blockchain, e.g. Plasma for Ethereum, Lightning Network for Bitcoin.

Proof of Work (PoW)

A consensus algorithm where participating nodes compete to solve a complex cryptographic problem. By expending computational power, the winner proves that it has done sufficient ’work’ to gain the right to add new transactions to the blockchain.

Slippage

The difference between the estimated and the actual price of the trade.

Stablecoin

A cryptocurrency that pegs its value to an external asset (like the U.S. Dollar or the price of gold). A stablecoin is generally less volatile than other cryptocurrencies.

Trustless

A trustless system does not require its nodes/participants to know or trust each other.

Turing-complete

A machine is said to be Turing-complete when it can do at least as much computation as a Turing machine. Among blockchains, Ethereum is considered to be Turing-complete since it can allow the deployment of sophisticated smart contracts that can, in principle, perform any task (given enough time and processing power).

Web 3.0

The third generation of internet services built on top of technologies like edge computing, machine learning, and decentralized data networks with the aim to make the internet more open and trustless.